Rupee remains strong on firm shares, weak dollar

Rupee remains strong on firm shares, weak dollar

Mumbai: The rupee remained strong in afternoon trades on Wednesday on the back of a weak dollar overseas and positive local shares.

At 2:15pm, the partially convertible rupee was at 44.3575/3650 per dollar, 0.3% stronger than its previous close of 44.48/49.

The index of the dollar against six major currencies was down 0.46% at 74.683 points. It had been at 75.245 points at the close of the local forex market on Tuesday

Shares were up more than 1% taking cues from strong Asian markets and a normal monsoon forecast that could boost the outlook for the economy.

Traders expect the rupee to trade in a range of 44.25-44.45 intraday.

Dollar demand from oil importers is likely to cap the rupee’s gains, dealers said. Oil is India’s biggest import item and domestic oil firms are the top purchasers of dollars in the local forex market.

ICE Brent crude futures rose by a dollar to $122.33 a barrel on Wednesday, as a rebound in equities and a weaker dollar offset fears over eroding demand.

The one-month onshore forward premium was at 26.50 basis points, compared with its previous close of 28.00. The three-month was at 83.75 basis points versus 83.50 and the one-year was at 319.25 basis points compared with 320.00.

The one-month offshore non-deliverable forward contracts were quoted at 44.64, weaker than the onshore spot rate.

In the currency futures market , the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were all at 44.4000, with total volume at $6.62 billion.